FTSE ends lower on China and housing data - London Report

THE FTSE 100 closed down for the third session in a row yesterday following data from China that showed deflationary pressures mounting.

The index was 1.15 per cent lower at the close, at 6,269.61 points.

Stocks with exposure to China fell, including Standard Chartered and luxury retailer Burberry Group, which ended the session 1.46 per cent and 0.77 per cent down respectively.

Weak data from China pulled the FTSE 100 down, as consumer inflation fell back and producer prices continued to deflate.

The consumer price index fell from a 13 month high of two per cent in August to 1.6 per cent in September, missing economists’ forecast.

The producer price index indicated deflation was reaching its fastest pace in six years, tumbling 5.9 per cent from where it stood a year ago.

The data came just a day after figures that showed imports had slumped, hitting many of the same sectors.

“In the short-term, sentiment appears to have turned substantially negative again… Chinese inflation data has come in well below expectations overnight,” said Markus Huber, senior analyst at Peregrine & Black.

Housebuilders also came under pressure, with shares in Taylor Wimpey falling 3.42 per cent, Persimmon 3.1 per cent and Barratt Developments losing 3.79 per cent.

The index is 12 per cent off the record highs it reached in April. Concern over Chinese growth contributed to the decline, after the country allowed its currency to devalue in August.

The market turmoil hurt the results of financial services firm Hargreaves Lansdown.

The Bristol-based firm said first-quarter assets under administration fell by £500m, weighed by stock market falls.

But the stock rose 3.7 per cent – the day’s biggest gainer – to its highest level in more than a year after the update, because new business inflows climbed to a record high.

Brokerage Numis described it as a “strong trading update” despite difficult market conditions.

“The group’s scale benefits are substantial and unmatched providing it with by far the highest operating margin and the buying power to provide the cheapest fund prices in the market,” Numis said in a note, raising its earning forecasts and rating the stock to a “buy”.